Everyone knows about some of the obvious environmental risks that agricultural businesses may be exposed to. Spraying pesticides from an airplane on a windy day when the neighbors don’t want free pesticides delivered indiscriminately comes to mind.
Then there are your offbeat exposures.
“We are seeing a lot more interest in environmental coverage for farmers on a lot of different levels. I have an agent with a farm owner who is land-applying biosolids. They are taking a waste cake product from water treatment plants and applying them to their land as a sort of natural fertilizer, but there are pollution exposures associated with that and if you apply it wrong and it runs off into a stream then you have algae blooms and fish kills because they can’t get oxygen, and there is a cause and effect,” said Bill Pritchard, founder and CEO of Beacon Hill Associates
, a wholesale insurance broker and program administrator specializing in environmental coverage.
“I have another agent working with a hog farm and they are doing a cogeneration plant, using hog waste as fuel to create electricity and they have all kinds of fascinating pollution challenges associated with that,” Pritchard said.
He said farmers and companies that provide services to farmers have significant environmental exposure. “But there is coverage out there, and it is affordable. There are more than 50 markets offering some kind of environmental product, probably more. I just stopped counting at 50.”
Samantha Longo, a broker with wholesale brokerage Worldwide Facilities, said agriculture pollution policies remain a tough sell. “A lot of farmers, even though they have the exposure, they don’t think they can afford to buy the coverage so they aren’t buying it. They buy the minimum GL that is required. On those policies, one of the carriers is Nationwide Ag and they provide $1 million (in pollution coverage in some GL policies) but most claims come in for well over $1 million. We are seeing claims in excess of $5 million, and for the guys that don’t purchase, it can put them out of business.”